Cory Booker’s tech startup failed but industry ties lasted

Cory Booker was the mayor of New Jersey’s largest city and considering a run for higher office, but he had a different goal in mind when he appeared on stage at the 2012 Tech Disrupt Conference in San Francisco.

Booker was there to promote Waywire, the social media company that he had recently co-founded. He believed the video-sharing network could change the way millennials consumed news and participated in politics – a prospect that positioned Booker as a tech-savvy political leader of the next generation and stood to earn him millions.

Waywire aimed to improve on YouTube by making it easier to create, share and discover videos based on one’s interests. Booker told the audience that the videos would elevate the voices of everyday Americans and their challenges, helping address everything from discrimination to joblessness. “We can change America at a far more rapid pace than it’s being changed right now,” he said.

Booker’s grand ambitions for Waywire crashed. The company fizzled out in the way that many digital startups have over the years. Booker kept his focus on politics, winning two elections to the Senate and earlier this year launching a bid to be president.

But his one-time aspiration to be a revolutionary tech mogul is a revealing window into his close association to the industry, his optimism about the power of technology and his willingness to mix public service with a for-profit business. At the time his involvement raised questions about whether he was potentially beholden to influential Silicon Valley leaders, who invested in the startup.

At campaign stops, Booker does not bring up Waywire. But the company could resurface as a political liability at a time when many Americans – including Booker and his Democratic rivals – are calling for tougher regulations on tech companies.

Booker declined an interview request, but campaign spokeswoman Sabrina Singh defended his decision to start Waywire while leading Newark, a city of 285,000 people.

“Cory is passionate about bringing people together, and when presented with the opportunity to be a part of a new, forward-thinking and socially-conscious online video network, he jumped at the chance,” she said.

Booker has taken a harder line toward the technology industry since Donald Trump’s election. Just last month, he wrote on Twitter that tech platforms “are becoming engines for discrimination, harassment, misinformation and extremism while stifling innovation.”

In an interview that aired Sunday on ABC’s “This Week,” Booker declined to endorse Sen. Elizabeth Warren’s call to break up Facebook. But he said the Justice Department should study consolidation in the tech industry and others and more aggressively enforce antitrust laws.

At the 2012 tech conference, Booker called Facebook founder Mark Zuckerberg “an American hero,” praising his entrepreneurship and philanthropy. Booker had persuaded Zuckerberg to donate $100 million to help improve Newark’s public schools.

Money from tech executives and employees has also helped fuel his political career. Former Google chairman Eric Schmidt and LinkedIn founder Reid Hoffman, who were among the early investors in Waywire, earlier this year gave $2,800 apiece to his presidential campaign, the maximum allowed.

Booker raised more than $447,000 from the internet industry for his Senate campaigns and his political action committee from 2013 through 2018, according to the Center for Responsive Politics.

Supporters say his knowledge of the industry gives him valuable insight, noting that he pioneered the use of Twitter to communicate with constituents. They say he believes in the power of technology to be a force for social good, calling Waywire an earnest effort to improve political dialogue among young people.

“I think this indicates that he’s a curious, and open and responsible person who doesn’t use his authority or his influence for himself but to find more policies to help people,” said Philip Stephenson, who was one of Waywire’s first employees in 2012.

Stephenson said the day-to-day operations of the company, which was run out of a Manhattan office by Booker’s founding partners Sarah Ross and Nathan Richardson, was plagued by uncertainty about its direction. He and other journalists were let go after a few months as the company struggled. Booker severed ties with it after a media firestorm surrounding his role, which became a bump on his path to the U.S. Senate.

Waywire aimed to capitalize on Booker’s popularity on Twitter, where he had amassed more than 1 million followers and communicated about storms and potholes with residents. Booker used his connections to help raise $1.75 million to start Waywire, which included investments from Schmidt’s Innovation Partners, Hoffman and LinkedIn CEO Jeff Weiner, Oprah Winfrey and Lady Gaga’s manager.

The company was entwined with Booker’s political brand from the start. The company posted videos that put Booker in a flattering light: delivering a commencement speech at his alma mater, Stanford; campaigning for President Barack Obama’s re-election in 2012; and answering questions such as, “How do you feel about your superhero status?”

He urged his constituents and supporters to send him “wires,” the homemade videos that he hoped would make the company compelling. A digital strategist who worked for him in Newark – and later in the U.S. Senate – joined the company.

Even as he was promoting Waywire publicly, Booker minimized his ties to it on the initial Senate financial disclosure form he filed as a candidate in 2013 running in a special election to replace the late Sen. Frank Lautenberg. He listed himself as a co-founder but didn’t list his ownership as an asset.

Two months later, in July 2013, he amended his disclosure to list his Waywire stake as worth between $1 million and $5 million and to add his role as a board member. He said those details had been inadvertently omitted.

His rivals in the Democratic primary criticized Booker after his role in the company was the subject of a front-page New York Times article days before the election. They questioned whether he was seeking to profit at Newark’s expense and was compromised by his tech associations. Tabloids pounced on a particularly juicy detail: that a Waywire advisory board included the teenage son of CNN President Jeff Zucker, who had been given a stock option for his role. The boy, 15, resigned.

Booker won the primary and shortly before the general election, announced that he had given his ownership stake to charity. A campaign spokesman said the donation wasn’t itemized in his tax returns but that it went to the New Jersey Community Foundation. Foundation President Hans Dekker said he could not confirm the gift under its privacy policy but that Booker “has been wonderfully philanthropic not only to our foundation, but also to Newark in general.”

Waywire was sold in 2013 for an unspecified sum to online video distributor Magnify Media, which took the brand in a different direction. Waywire’s remaining assets were sold again, in 2017, to a company controlled by a Ukrainian entrepreneur and is no longer operating.

Steve Rosenbaum, of Magnify Media, said Booker’s vision for Waywire was solid and remains relevant today. But he said Booker’s role with the company was not sustainable once he started campaigning for Senate, which happened earlier than he expected following Lautenberg’s death.

“All of a sudden, it was pretty clear that he just didn’t have the bandwidth nor was it the right thing for him to be running for U.S. Senate and also running a startup,” he said.

Source from: The Peninsula